Citrus Can Expect Profitable Year

Published: Friday, August 16, 2013 at 9:49 p.m.

Last Modified: Friday, August 16, 2013 at 9:49 p.m.

WINTER HAVEN | Florida citrus growers can expect a profitable 2013-14 season if citrus consultant Elizabeth Steger hit close to the bull's-eye with her estimated 130 million boxes of oranges harvested for the new season beginning in October.

The Kissimmee consultant usually comes out with the first orange crop estimate for the coming season, and it often serves as a bellwether for negotiations over farm prices between growers and Florida juice processors, who buy 95 percent of the annual orange crop.

Hours later, Louis Dreyfus Citrus Inc. in Winter Park reported a similar estimate of 132 million orange boxes next season.

If it proves accurate, Steger's estimate would represent a 2.6 percent drop from 133.4 million boxes harvested in the 2012-13 season.

A lower Florida crop combined with a smaller Brazilian orange crop, down 26 percent according to a recent U.S. Department of Agriculture estimate, should translate to profitable farm prices in the new season, said Larry Black, general manager of the Peace River Packing Co. in Fort Meade, which owns 1,600 grove acres.

"A low crop in Brazil and a low crop in Florida add discipline to the market and should be good for the Florida grower," Black said. "There should be adequate (orange juice) supplies to meet consumer needs and be good for farm prices."

Brazil is the world's largest orange grower and OJ producer. Florida and Brazil together account for more than 80 percent of global OJ supplies.

"I would think a Florida crop of that size would have an upward pressure on grower returns," said Mike Sparks, chief executive at Lakeland-based Florida Citrus Mutual, the state's largest growers' representative.

Tom Spreen, a retired University of Florida agricultural economist and authority on citrus industry economics, agreed growers can expect higher 2013-14 farm prices if the Steger or Dreyfus estimates come close to the mark.

Spreen's early prediction for the average 2013-14 farm prices was $1.65 per pound solids for early and mid-season oranges, and $1.85 per pound solids for late-season Valencia oranges. That would represent an 18 percent increase over the average 2012-13 early-mid price and a 7 percent increase on Valencias.

"At those price levels, growers should most definitely have a profitable season," Spreen said.

Processors pay growers based on pound solids, a measure of how much juice is squeezed from the fruit. A gallon of orange juice has about one pound solids.

"Those (farm price) numbers and higher are good numbers for the growers," said Black, who declined to endorse Spreen's estimates.

"Those are solid prices for the growers," Sparks agreed.

Florida citrus people agree, however, that any pre-season estimate comes with a particularly huge caveat this year. That is whether Florida orange groves will experience a second consecutive season of unprecedented pre-harvest fruit drop because of citrus greening disease, which has infected most citrus trees in Florida.

"This is going to be a real tough year to estimate the crop" because of last season's drop problem, Black said.

"Was last season a harbinger of where the industry is headed with greening or was last year an aberration?" he said. "This is a really crucial year in terms of where the industry goes from here."

The extent of pre-harvest drop won't become known until the harvest begins in October. Steger reportedly told her clients said she averaged the past two seasons in calculating the 2013-14 pre-harvest drop.

Last season's unanticipated drop meant the initial USDA October forecast was 13.4 percent higher than its final July estimate. Steger was off 17.5 percent and Dreyfus was off almost 24 percent.

The USDA will release its initial 2013-14 citrus crop forecast on Oct. 11.

Steger began conducting her pre-season harvest estimate before the 1997-98 season. She strips a statistically significant number of orange trees across Florida, counts the fruit and measures its size, then uses historical averages to project both measures by harvest time.

Since that first season, Steger's estimate has averaged 4.2 percent higher than the final USDA crop figure. That does not include the two hurricane season, 2004-05 and 2005-06, which blew an estimated one-third of citrus fruit off the trees before harvest,

Dreyfus, employing a similar method, began its survey before the 1998-99 season. Its estimates have averaged 6 percent higher than the final USDA harvest figure, not counting hurricane seasons.

Polk County leads the state's citrus-producing counties with 82,572 grove acres and 9.9 million trees in 2012, according to the latest USDA data. It historically leads the state in citrus production, as it did in the 2011-12 season with 31.2 million boxes.

[ Kevin Bouffard can be reached at kevin.bouffard@theledger.com or at 863-401-6980. Read more on Florida citrus on his Facebook page, Florida Citrus Witness, http://bit.ly/baxWuU. ]

<p>WINTER HAVEN | Florida citrus growers can expect a profitable 2013-14 season if citrus consultant Elizabeth Steger hit close to the bull's-eye with her estimated 130 million boxes of oranges harvested for the new season beginning in October.</p><p>The Kissimmee consultant usually comes out with the first orange crop estimate for the coming season, and it often serves as a bellwether for negotiations over farm prices between growers and Florida juice processors, who buy 95 percent of the annual orange crop.</p><p>Hours later, Louis Dreyfus Citrus Inc. in Winter Park reported a similar estimate of 132 million orange boxes next season.</p><p>If it proves accurate, Steger's estimate would represent a 2.6 percent drop from 133.4 million boxes harvested in the 2012-13 season.</p><p>A lower Florida crop combined with a smaller Brazilian orange crop, down 26 percent according to a recent U.S. Department of Agriculture estimate, should translate to profitable farm prices in the new season, said Larry Black, general manager of the Peace River Packing Co. in Fort Meade, which owns 1,600 grove acres.</p><p>"A low crop in Brazil and a low crop in Florida add discipline to the market and should be good for the Florida grower," Black said. "There should be adequate (orange juice) supplies to meet consumer needs and be good for farm prices."</p><p>Brazil is the world's largest orange grower and OJ producer. Florida and Brazil together account for more than 80 percent of global OJ supplies.</p><p>"I would think a Florida crop of that size would have an upward pressure on grower returns," said Mike Sparks, chief executive at Lakeland-based Florida Citrus Mutual, the state's largest growers' representative.</p><p>Tom Spreen, a retired University of Florida agricultural economist and authority on citrus industry economics, agreed growers can expect higher 2013-14 farm prices if the Steger or Dreyfus estimates come close to the mark.</p><p>Spreen's early prediction for the average 2013-14 farm prices was $1.65 per pound solids for early and mid-season oranges, and $1.85 per pound solids for late-season Valencia oranges. That would represent an 18 percent increase over the average 2012-13 early-mid price and a 7 percent increase on Valencias.</p><p>"At those price levels, growers should most definitely have a profitable season," Spreen said.</p><p>Processors pay growers based on pound solids, a measure of how much juice is squeezed from the fruit. A gallon of orange juice has about one pound solids.</p><p>"Those (farm price) numbers and higher are good numbers for the growers," said Black, who declined to endorse Spreen's estimates.</p><p>"Those are solid prices for the growers," Sparks agreed.</p><p>Florida citrus people agree, however, that any pre-season estimate comes with a particularly huge caveat this year. That is whether Florida orange groves will experience a second consecutive season of unprecedented pre-harvest fruit drop because of citrus greening disease, which has infected most citrus trees in Florida. </p><p>"This is going to be a real tough year to estimate the crop" because of last season's drop problem, Black said.</p><p>Spreen agreed nobody knows whether last season's pre-harvest drop will continue into 2013-14.</p><p>"Was last season a harbinger of where the industry is headed with greening or was last year an aberration?" he said. "This is a really crucial year in terms of where the industry goes from here."</p><p>The extent of pre-harvest drop won't become known until the harvest begins in October. Steger reportedly told her clients said she averaged the past two seasons in calculating the 2013-14 pre-harvest drop.</p><p>Last season's unanticipated drop meant the initial USDA October forecast was 13.4 percent higher than its final July estimate. Steger was off 17.5 percent and Dreyfus was off almost 24 percent.</p><p>The USDA will release its initial 2013-14 citrus crop forecast on Oct. 11.</p><p>Steger began conducting her pre-season harvest estimate before the 1997-98 season. She strips a statistically significant number of orange trees across Florida, counts the fruit and measures its size, then uses historical averages to project both measures by harvest time.</p><p>Since that first season, Steger's estimate has averaged 4.2 percent higher than the final USDA crop figure. That does not include the two hurricane season, 2004-05 and 2005-06, which blew an estimated one-third of citrus fruit off the trees before harvest,</p><p>Dreyfus, employing a similar method, began its survey before the 1998-99 season. Its estimates have averaged 6 percent higher than the final USDA harvest figure, not counting hurricane seasons.</p><p>Polk County leads the state's citrus-producing counties with 82,572 grove acres and 9.9 million trees in 2012, according to the latest USDA data. It historically leads the state in citrus production, as it did in the 2011-12 season with 31.2 million boxes.</p><p>[ Kevin Bouffard can be reached at kevin.bouffard@theledger.com or at 863-401-6980. Read more on Florida citrus on his Facebook page, Florida Citrus Witness, http://bit.ly/baxWuU. ]</p>